Last time round I discussed the strange and unfavourable interest rates for business savings accounts, after discovering that they’re roughly 1% below personal savings accounts on average. But when it comes to different conditions for business savers, that’s just the beginning.
The other big sting appears to be opening balances that don’t attract interest. While personal accounts often advertise higher rates for a set minimum balance, the business accounts reverse the deal — offering NO interest on the first several thousand dollars. So your money is stashed in the bank’s savings account, earning them interest yet – for no apparent reason – earning you nothing.
Sound crazy? Here are the figures:
Westpac’s Business Max-i Bonus, NAB’s Business Cash Maximiser and Citibank’s Ultimate Business Saver all pay no interest on the first $10,000. ANZ’s Business Online Saver offers no interest on the first $5,000, and AMP’s Business eASYSaver account only kicks off at $2,000.
It’s worth up to $525 every year in lost interest – and so far as we can see, the banks make no attempt to justify this levy on business savers.
Kudos, then, to Commonwealth Bank, along with BankWest, Rabo, ING and Suncorp, whose business savings accounts pay interest on the full balance. As well they should. After all, the banks earn money on your first $10,000 — so why shouldn’t you?!
Citibank even reserves the right to close your account if you fall below that $10,000!
On the up side, if you meet all the banks’ conditions, most business savers are fee free. Not quite a saving grace, but it’s something.